BIO-TECHNE Corp Q4 FY2024 earnings call

• Fourth quarter results in line with initial expectations, 1% year-over-year organic revenue growth. • Core portfolio of research and diagnostic reagents with growth verticals led to 1% growth in challenging fiscal year 2024. • ProteinSimple instrumentation had low single-digit organic growth for the quarter with double-digit consumable growth, Ella instrument a standout. • Cell and gene therapy vertical grew mid-single digits, GMP small molecules business grew nearly 50% in Q4. • Spatial biology vertical saw solid growth with COMET instrument adoption. • Molecular diagnostics growth pillar had over 20% organic revenue growth, ExoDx Prostate performing well. • End markets: Biopharma and academia declined low single-digits, China showed stabilization with reagent growth. • Protein Sciences segment exposed to China and biopharma end markets, positioned for improvement as markets recover. • Diagnostics and Genomics segment organic revenue growth 9% in Q4 and 6% for fiscal year.

Protein Sciences segment: Declined 3% organically in the quarter and 2% for the fiscal year. Diagnostics and Genomics segment: Organic revenue grew by 9% in the quarter and 6% for the full fiscal year. ProteinSimple instrumentation within Protein Sciences had low single-digit organic growth for the quarter with double-digit consumable growth, including Ella instrument and related consumables growing double-digits. Cell and gene therapy vertical in Protein Sciences grew mid-single digits, with GMP small molecules business growing nearly 50% for the quarter. Molecular diagnostics growth pillar in Diagnostics and Genomics had over 20% organic revenue growth, with ExoDx Prostate volumes increasing almost 35% in Q4. Spatial biology growth pillar saw solid growth with COMET instrument adoption. The five-year CAGR for growth verticals is over 20%, accounting for about 45% of revenue in fiscal 2024.

• Fiscal 2025 organic revenue growth expected to be low single-digit in first half, potentially mid-single-digit as biotech funding returns, gradually accelerating to high single-digits in second half. • Adjusted operating margin for first half of 2025 expected to be 200-300 basis points lower than prior year, second half expected to be 100-200 basis points higher. • M&A remains top priority for capital allocation. • Aim to exit 2025 poised for double-digit growth towards adjusted operating margins of 35% long-term.

• Uncertainty in end market recovery timing affecting growth projections. • Capacity constraints with Lunaphore initially causing demand outstripping capacity. • Geographic mix impacting effective tax rate. • Fetal bovine serum business with lower growth rate and margin profile being phased out, impacting segment performance.

Q: Elaborate on RUO antibodies and cytokines in the quarter and instrumentation dynamic.

A: Instrumentation growth rates under pressure but consumables related to instruments growing double digits for seven quarters. RUO antibodies had lumpy business but nicely positioned.

Q: Clarify fiscal year 2025 guidance.

A: Gradual improvement in end markets expected, with low single-digit growth in first half and potential mid-single-digit later, accelerating to high single-digits in second half.

Q: Headwinds on margin side in first half due to incentive comp.

A: Incentive compensation reinstatement creates ~100 basis point headwind in first half, second half expected to benefit from revenue volume leverage, productivity initiatives.

Q: Growth outlook for four key franchises.

A: Still confident in four growth verticals, but timeframe for reaching projected numbers delayed due to end market slowdown.

Q: RUO reagent product line growth acceleration independent of market improvement.

A: Linkage to growth platforms key, some RUO reagents fit in pull-through.

Q: China stimulus impact on portfolio.

A: China stimulus on its way, instrumentation well positioned to benefit, reagents already showing growth.

Q: Lunaphore manufacturing backlog and fiscal 2025 delivery.

A: Capacity constraints being addressed, Q1 2025 expected to have capacity and demand in line.

Q: Biopharma end market performance across geographies.

A: Biopharma declined low single-digits, consistent globally, momentum stabilized.

Q: Lunaphore reagents linking process.

A: RNAscope HiPlex linking happening this quarter, antibodies already in place, portfolio to be broadened.

Q: Academic end market recovery and molecular diagnostics growth momentum.

A: Academic end market expected low single-digit growth, molecular diagnostics growth from market health and market share gain